EUR/CHF: rare and peculiar

EUR/CHF: rare and peculiar

2022-12-20 • Updated

EURCHF is a rare cross pair that is nonetheless very interesting both from the technical and fundamental point of view. Let’s throw a strategic look at it to see what we may expect in the nearest future.

Not going too far back into the past, we can distinguish three periods of performance in EUR/CHF.

History: three periods

The first period (marked “1”) is the time when the Swiss franc was pegged to the euro. The price was flat at 1.2050 most of the time. A plunge like never before marks the end of this period – Swiss financial authorities decided to unpeg the franc from the euro.

The second period (marked “2”) roughly corresponds to 2015-2018. During those years, EUR/CHF has been mostly rising. It peaked exactly at 1.2050 and bounced downwards.

The third period starts with the bounce from the strategic resistance of 1.2050 and goes into the present moment. EUR/CHF basically undid all the gains it did in the second period – now, it is roughly where it was shortly after the drop when the unpeg took place.

Fundamentals: support at all cost

So is it going below the support of 1.0520? Unlikely – the Swiss economy depends on European buying. Expensive CHF will demotivate the outside Europeans to buy what Switzerland has to offer – that’s why the Swiss National Bank has been so preoccupied lately to not let CHF appreciate too much. “Too much” means EUR/CHF going below 1.0520: we can see this strategic support as solid ground. For this reason, in the mid-term, EUR/CHF may approach and even dip below this mark, but in the long term the possibility that it will go significantly lower is not that big. For this reason, expect a strategic bounce upwards, which may have already started. In the end, the channel 1.0520 – 1.2000 may well turn out to be a multiyear sideways movement zone where the SNB is trying to keep the CHF.

1.png

                                                                                                    LOG IN

Similar

Oil: Russia-Ukraine Crisis Could Boost Oil Prices
Oil: Russia-Ukraine Crisis Could Boost Oil Prices

Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...

WTI and Brent React To a Key Pivot
WTI and Brent React To a Key Pivot

Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...

Latest news

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera